Watson to buy Actavis, creating generics giant

US drug maker Watson Pharmaceuticals said Wednesday it will buy Iceland-based Actavis for 4.25 billion euros ($5.62 billion), creating the world's third-largest generic drugs company.Watson, maker of a generic version of Lipitor, Pfizer's blockbuster anti-cholesterol drug, said the acquisition of the privately held Actavis would greatly expand its global footprint.

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Pharmaceutical giant, Actavis Plc (NYSE: ACT), has announced plans to continue looking for potential acquisition targets after acquiring Allergan, Inc. (NYSE: AGN) in a $66 billion deal. With its completion expected later this year the Actavis-Allergan deal will be 2014’s largest merger in the pharmaceutical industry.

American pharmaceutical giant Pfizer Inc. (PFE) has put forward a bid of $100 billion for British AstraZeneca Plc (ADR) (AZN), according to a report published by London-based Sunday Times. The unofficial talks are currently inactive, with both sides decidedly quiet about the news.

Yesterday, a US federal court dismissed the ongoing antitrust lawsuit against Pfizer Inc. (PFE) and India-based Ranbaxy Laboratories Limited (ADR) (RBXLY). The lawsuit, filed by retailers and distributors alleged both drug-makers of being involved in illegal agreements to prevent the generic version of Pfizer’s blockbuster cholesterol drug, Lipitor, from reaching the market. The drug’s patent expired in 2011.

Pfizer Inc. (PFE) is working on making its blockbuster cholesterol drug, Lipitor, available over-the-counter (OTC) for users. The company believes that patients who are prescribed the drug can take it by simply following instructions provided with the medicine, and do not require medical supervision to regulate intake.

Yesterday, Actavis plc (ACT) announced its acquisition of New York City based specialty pharmaceutical company Forest Laboratories, Inc. (FRX). The acquisition, which is to be paid for in stock and cash, cost Dublin-based Actavis about $25 billion. Not only is this a great addition to Actavis’s – the second-largest in the world by revenues in 2012 – but the deal has financially benefited activist investor Carl Icahn, who invested in Forest Laboratories in 2009.

By Trefis:
Pfizer (NYSE:PFE) has seen its stock underperform some of its peers like Abbott Labs (NYSE:ABT) and Merck (NYSE:MRK), as the company continues to struggle with various lawsuits and complaints.